NEWS RELEASE
Office of Maryland Attorney General J. Joseph Curran, Jr.


January 31, 2001 Media Inquiries: Sean Caine 410-576-6357

CURRAN'S OFFICE, 47 OTHER STATES REACH CONSUMER PRIVACY AGREEMENT WITH TOYSMART

Baltimore - Attorney General J. Joseph Curran, Jr. announced that the privacy of approximately 250,000 consumers will be protected under an agreement approved by the U.S. Bankruptcy Court involving Maryland, 47 other states, and Toysmart.com. Toysmart has agreed to destroy its customer list, and in exchange, Buena Vista Internet Group, a Disney subsidiary, will pay the company $50,000.

"Consumers have every reason to expect that personal information will remain private when a Website makes that promise," Curran said. "We expect companies to honor their own policies and we urge consumers to review privacy statements before revealing personal information online."

Toysmart, which sold educational toys online, last summer proposed selling customers' names, addresses, billing information and shopping preferences after the company experienced financial hardship. Attorney General Curran's Consumer Protection Division, together with attorneys representing 37 other states, joined an objection to that proposal filed by the Massachusetts Attorney General's Office with the U.S. Bankruptcy Court in Boston. The company's Website contained a privacy policy which promised that Toysmart would "never" share customer information with third parties. Under the agreement, the list will be destroyed by Toysmart at the end of the Bankruptcy action. Maryland and the other states will have the right to take all appropriate steps to verify that it was destroyed.

The Federal Trade Commission also filed a lawsuit in U.S. District Court, alleging that the proposed sale of the customer list would be illegal. When the FTC sought to settle its case with Toysmart, Maryland, 42 states, two territories and the District of Columbia joined an objection to the proposed settlement filed by Massachusetts because it would have allowed the customer list to be sold to a third party without first informing Toysmart's customers and obtaining their consent. The FTC, Texas and New York separately entered into the same agreement that Toysmart reached with Maryland and the 47 other states.

###